Taking On Fannie And Freddie Without stronger regulation, argues Rep. Richard Baker, the mortgage giants present a huge market risk
By Ron Insana; Richard Baker
September 1, 2003
(MONEY Magazine) – Rep. Richard Baker is a driven man. The mission of this firebrand Louisiana Republican: to ensure that Fannie Mae and Freddie Mac, two of the world’s largest financial institutions, aren’t on a collision course with disaster. Baker, a minister’s son and amateur astronomer, goes so far as to compare the potential havoc that, in his view, inadequate oversight of the two mortgage titans could wreak on financial markets and taxpayers to the fallout from an asteroid hitting the earth.
Baker, chairman of the House subcommittee that oversees the two congressionally chartered "government-sponsored enterprises" (GSEs), has for years been voicing concerns about Freddie, formally known as the Federal Home Loan Mortgage Corporation, and Fannie, the Federal National Mortgage Association. A recent internal investigation of accounting at Freddie Mac proved his concerns about the $34 billion (market capitalization) company to be well founded, with allegations of lax internal controls and questionable accounting maneuvers.
Nothing racist about common sense and crooks!
Man from ACORN: Are you saying that blacks aren’t affected and don’t invest in WallStreet? The black politicians who fought tooth and nail to defend the corruption are far from poor. The black homeowners who lost their homes got hurt too. In other words everyone got hurt and this is a major contributing factor to the current economical situation we are in.
Maldavi: Nothing racial at all about it until you decided to add the ‘Nothing racist’ comment.
Hmm… wonder why you felt compelled to do that?
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I was responding to a poster! Is that still legal under Obama rule?
ty claudiac, I think Baker was on the money!
I did not read the other answers before giving my own, but here it is, as simply put as possible.
Democrats pushed for legislation to make it possible for many who could never pay back loans to get housing loans. This began during the Clinton Presidency, and in fact Clinton is the President who signed the bill into law.
For years it has been known that poor management from within was only going to add to the problem. People like this Raines character, whose first name escapes me, and his counterparts made millions cooking the books at Freddie Mac, Fannie Mae, and Country Wide. For this reason , Republicans and George Bush pushed for additional regulations as early as 2003.
The problem was people like Congressman Barney Frank, (D), and Senator Chris Dodd, (D) had their hands in the cookie jar as well. The increased regulation being introduced would have hurt these Democrats, and others, as well as their friends.
The media refuses to fully report Democratic involvement and there are too many people in this country who believe ABC, NBC, CBS. CNN, and their subsidiaries to be totally honest, and non-partisan. In these people’s opinion, FOX News is the only one guilty of one sided reporting. Since these networks did not report these problems, then many Democrats feel it never happened. So how can they forget, what they never knew?
Bottom line is that, had loans which could and would never be repaid had never been made, the banking industry would not be in the situation it in today. If guilty parties such as the former CEO’s of Freddie and Fannie, and their "partners" in Congress were actually investigated, we might see some improvement in the situation.
Finally, it should be obvious that Democrats are to blame for this, because Democrats are not screaming for investigations. If they thought for one minute, this mess could be blamed on Republicans, they would be demanding investigations. But since all finger point to Democrats, and they know it, they cannot afford to have this investigated, and the truth be known.
And yet his party held absolute power in the government for years and did nothing to fix the problem. Whoopdeedo.
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US currency is likely to lose its value ever faster in a few month, as a concern of the bailouts, after Bush spent all our reserves in the war!!
The fed reserve claims to have 575 billions cash available for rescue plans, Yet, the Chinese and Japanese Gov claim they should have 1 trillions USD each reserved with Fed.. Now, they are asking the US gov to re pay the interests on money borrowed in Japanese and Chinese currencies due to the fact that USD is rapidly losing its value.
The US government needs to borrow at least US$1 trillion in the coming year, excluding the US Treasury’s $700 billion plan to bail out the financial and other industries, said Kazuo Mizuno, chief economist in Tokyo at Mitsubishi UFJ Securities Co, a unit of Japan’s largest publicly traded lender by assets. That amount is likely to grow as the US government continues to rescue failed parts of the economy and has to raise more debt – that is, issue government bonds, or Treasuries – to fund such rescues.
China on November announced its sweeping economic stimulus package valued at about 4 trillion spending on its infrastructure, which will requires money from US reserves, putting more pressure on the value of USD.
http://morbidsymptoms.blogspot.com/2008/11/end-of-dollar-as-reserve-currency.html
http://www.moneyweek.com/investments/can-china-and-japan-save-the-us-dollar.aspx
Since 2004, when the amount of the government bond issuance reached an annual average of $400 billion, 94% of US government bonds have been purchased by China and Japan.
"There is no wonder the dollar will weaken," said Eisuke Sakakibara, Japan’s former top currency official and now
a professor at Waseda University. "The dollar now looks strong for a technical reason. The money the US financial
firms had invested in the world is being repatriated into the homeland, causing dollar-buying.
But once this conversion into the dollars is done, the currency will head south,"
Sakakibara said at a forum in Tokyo on Sunday.
Japan holds the world’s second-largest foreign reserves, totaling about $1 trillion, following China,
which has about $2 trillion in forex reserves, most of them in USD.
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Nothing racial at all about it until you decided to add the ‘Nothing racist’ comment.
Hmm… wonder why you felt compelled to do that?
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They have nothing to say about something to intelligent for them to read break it down to 5th grade for them! Democrats your boys stole lied and caused the mortgage meltdown! Naming names Barney Frank put his butt in prison! But we all know the Democrats are Criminals ! Corruption is the mainstay of the party ,that’s how we got this terrorist friendly Obama!
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Aside to Maldavi: The asker added that comment because his very first answer called him a racist, that’s why. Wonder why that poster felt compelled to answer that way?
Unfortunately, most people who vote for liberal policies have the attention spans of gnats. They do not recall when or if someone warned against a certain event or support, nor do they recall who ignored those warnings.
Baker wasn’t far off the mark as to the catastrophic proportions of the problem, was he?
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Typical Democrat response, I don’t like what you said so you are a racist and yes the Democrats like Barny Frank caused the problem but its the Republicans fault because they didn’t stop them.
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Typical liberals calling you a racist just because you brought up a factual point and they have no good argument for it other than calling you a racist. Shame on them.
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I did not read the other answers before giving my own, but here it is, as simply put as possible.
Democrats pushed for legislation to make it possible for many who could never pay back loans to get housing loans. This began during the Clinton Presidency, and in fact Clinton is the President who signed the bill into law.
For years it has been known that poor management from within was only going to add to the problem. People like this Raines character, whose first name escapes me, and his counterparts made millions cooking the books at Freddie Mac, Fannie Mae, and Country Wide. For this reason , Republicans and George Bush pushed for additional regulations as early as 2003.
The problem was people like Congressman Barney Frank, (D), and Senator Chris Dodd, (D) had their hands in the cookie jar as well. The increased regulation being introduced would have hurt these Democrats, and others, as well as their friends.
The media refuses to fully report Democratic involvement and there are too many people in this country who believe ABC, NBC, CBS. CNN, and their subsidiaries to be totally honest, and non-partisan. In these people’s opinion, FOX News is the only one guilty of one sided reporting. Since these networks did not report these problems, then many Democrats feel it never happened. So how can they forget, what they never knew?
Bottom line is that, had loans which could and would never be repaid had never been made, the banking industry would not be in the situation it in today. If guilty parties such as the former CEO’s of Freddie and Fannie, and their "partners" in Congress were actually investigated, we might see some improvement in the situation.
Finally, it should be obvious that Democrats are to blame for this, because Democrats are not screaming for investigations. If they thought for one minute, this mess could be blamed on Republicans, they would be demanding investigations. But since all finger point to Democrats, and they know it, they cannot afford to have this investigated, and the truth be known.
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Because they also forget that Rahm was involved with fannie mae as well.
I think that is Obama’s new cheif of staff. amazing your getting tagged as a racist.That is the typical remark when you have lost the argument.
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As usual, someone decided to blame the Republicans again. Get it straight people. Both parties bear some blame. As of 2006, every attempt was squashed. So even though Reps had control the year this was written–Dems railed every effort later on as well. What it comes down to is, we as Americans (not partisans) need to quit bashing each other out of some inadequacies in our own lives and take a stand. Not against each other–but against these representatives we have voted in who refuse to do their job. We pay them a lot of money to keep screwing America.
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